Accrual

The government's decision to change its system of accounting from cash to accrual basis is welcome. It would add a proper balance sheet to the government's accounts that brings out the future fiscal implications of its current activities. The increased fiscal transparency would in turn enhance accountability. Politicians would find it more difficult to buy populist peace today with future misery that would be the head-ache of some other set of politicians. Under the cash...

NEW DELHI: Gujarat Pipavav Port today said it will now fund its expansion plans through internal accruals as it terminated loans from the multi-lateral agency IFC. "In view of its business performance and cash flows, the board of directors decided to cancel the ECB (external commercial borrowing) loan from the International Finance Corporation and will now fund the ongoing expansion plan through its internal accruals," Gujarat Pipavav Port Ltd said in a filing to BSE. ...

NEW DELHI: The department of posts is all set to become the first government arm to move to a modern accounting system that will capture all its liabilities and assets in its financial statements. The current cash-based accounting does not take into account many of its assets such as land holdings and liabilities like employees' pension benefits. The new accounting system will give a realistic picture of the department's financial health. The country's accounting rule-maker, the...

NEW DELHI: The government will in five years shift to a new accounting system for its annual financial statements, where transactions are recorded in the books even if cash changes hands later. Accrual-based accounting brings more clarity and transparency in the government's financial health by showing 'hidden' assets and liabilities. For example, the future liability to redeem oil bonds issued to state-run firms currently does not get...

NEW DELHI: Railway minister Suresh Prabhu is bringing his experience as a chartered accountant to bear on an effort to spruce up the national transporter's account books in order to make them transparent enough to attract more private investment. As part of the exercise, the cash-strapped railways is looking to move toward an accrual-based system of accounting from the current cash-flow mechanism . The railways is tying up with the Institute of...

MUMBAI: JSW Energy plans to bid for coal blocks in the upcoming auctions and is upbeat about the fall in the dry fuel's price in the international market as it helps boost the company's financials, Chief Executive Sanjay Sagar said. But the company is concerned about subdued demand for power in the country. "It's one of the biggest anomalies in the Indian power sector, that power demand continues to be depressed despite the fact that large...

Cash- as opposed to accrual-based budgeting is used by central and state governments for several reasons. First, cash is widely used and the impact on the economy, including borrowing needs, is easily understood. Second, cash flows are easily tracked leading to expenditure control and compliance with expenditure limits. Third, cash measurement provides reasonably accurate information to make budgetary choices because the time gap between the occurrence of an expenditure activity in government and cash...

MUMBAI: The integrated specialty carbon corporation and the coal tar pitch producer Himadri Chemicals today said it is planning to invest Rs 1,900 crore for coal tar capacity expansion and foraying into new by-products like pitch coke, a senior company executive has said. "We have lined up to invest Rs 1,200 crore for expanding our coal tar capacity to one million tonne by 2015, from the present 2.5 lakh tonne in phases. We are also looking to...

NEW DELHI: The department of posts (DoP) will deliver a monetary value to the heritage buildings, large chunks of prime land and other properties that it owns as it braces to adopt a new accounting method that will see its financial statement presented just as corporates. The assets, scattered across the country, will be assigned a financial worth, with the help of accounting rule-maker Institute of Chartered Accountants of India (ICAI) and the urban development ministry.

In any business, the profit lies embedded or dormant day after day or from transaction to transaction but such quiescent profit or loss cannot be equated to profits charged to tax under Sections 4 and 5 of the Income-Tax Act, 1961. Undoubtedly, such profits are taxable but here one has to understand the concept of accrual of profits or income which becomes determinable, depending on the method of accounting, at the end of the accounting year or any other period determined by...

Government to adopt new accounting system Government will in five years shift to a new accounting system for its annual financial statements, where transactions are recorded in the books even if cash changes hands later, said Comptroller Auditor General in a press release on Wednesday. Accrual-based accounting brings more clarity and transparency in the government's financial health by showing 'hidden' assets and liabilities. For example, the future liability to redeem oil bonds issued to state-run...

NEW DELHI: ICAI, the apex body of chartered accountants, will help Employees' Provident Fund Organisation (EPFO) to migrate to accrual accounting system. In this regard, the Institute of Chartered Accountants of India (ICAI) would take up a pilot project for EPFO. A Memorandum of Understanding has been inked between ICAI Accounting Research Foundation (ICAI ARF) and EPFO. "The project with EPFO represents the first phase wherein the ICAI ARF will study EPFO's...

MUMBAI: Private sector general insurer Tata AIG has said it may not require fresh capital infusion from parent companies since its internal acrruals would take care of its future growth. "On a normal growth trajectory, our internal accruals will take care of our future growth," Tata AIG Chief Executive Kaushal K Mishra told PTI. Mishra said that the company would be able to fund its growth through internal accruals, but added that a growth of more...

MUMBAI: The integrated specialty carbon corporation and the coal tar pitch producer Himadri Chemicals today said it is planning to invest Rs 1,900 crore for coal tar capacity expansion and foraying into new by-products like pitch coke, a senior company executive has said. "We have lined up to invest Rs 1,200 crore for expanding our coal tar capacity to one million tonne by 2015, from the present 2.5 lakh tonne in phases. We are also...

The JBM Group has acquired Tesco Go SpA , a Turin-based engineering services company. In an interview with ET Now , Nishant Arya , Executive Director, JBM Group, talks about the new acquisition and its impact on JBM's financial benefits. Excerpts: ET Now: Can you confirm with us the consideration involved in this buyout and how you plan to fund this acquisition? ...

It may be a good time to open a fixed deposit and lock in at high levels before the interest rate cycle turns. ET Wealth lists out the key things you need to know before investing in these fixed income options. 1. FDs are not entirely safe Don't think your money is completely safe when you invest in a fixed deposit. While corporate deposits are unsecured loans that do not guarantee anything to the investor, in case of banks, the Deposit Insurance and Credit...

Q: I have invested in Kisan Vikas Patra, Post MIS and RBI bond (interest cumulative scheme) in my minor son's name. By the time these schemes mature, my son will be a major. So, 1. Can they be treated as his capital at the time of maturity? 2. I do not consider accrued interest on the KVP and the RBI bond as my income in tax computation of my income in any assessment year. I want to take capital with interest directly to his capital. 3....

Sandip Somany , Joint MD, HSIL in an interview with ET Now talks about the acquisition plans of the company for the year ahead. Your company is looking for acquisitions to strengthen product lines. Could you indicate to us what the product line and geographies that you are targeting for acquisitions and over what period of time will this entire 400 crores that you are indicating would be utilised? We have been doing very well as you...

M Goutham Reddy , Executive Director, Ramky Infrastructure Ltd in an interview with ET Now talks about the expected growth potential and future plans of the company. ET Now: You have completed the financial closure for the J&K road project. If you could tell us what the update is as far as construction of this road goes and also tell us at what rate you have borrowed from the banks at. M Goutham Reddy: Our...